Radley sees good growth in US despite webstore issues denting UK sales

Radley+Co Limited, the company that owns the Radley London label, has reported its results for the 53 weeks to the end of April last year. Looking at the headline figures for the parent company, it said that its sales performance of £77.3 million was up 2.1% with growth driven by the US (up 12%), although the UK was down 1%.

The company has been seeing generally robust sales growth in the US and said that its direct-to-consumer (DTC) channels continued to grow during the period, accounting for 63% of sales compared to 47% in the prior year. The group’s marketplace business grew at 38% as Radley expanded its footprint on Amazon. Drop ship fulfilment with its major partners grew by 73% and it said it’s proving to be a profitable model, remaining a focus for future expansion. Growth in its outlet channel also supported top-line growth but it remains in a proof-of-concept phase. However the group’s wholesale business in the US declined 26%, although this reflected a shift towards the other channels.

The UK performance was mainly dented by disruption to its website following disruption from its new platform launch and this also impacted profitability. Its online sales fell 20% during the period although physical sales grew 8%. 

The move towards physical stores on the part of consumers was particularly marked in central London where store and concession sites more than doubled turnover in the year. The concession business in John Lewis had a strong year with store sales growing 15%, while its UK wholesale business excluding clearance deals grew by 12% due to a rebound in travel retail post pandemic.

One key piece of good news is that its web platforming issues have been resolved and the company said online sales have now recovered.

But on the profits front, the operating result widened from a negative £2.4 million a year earlier to -£5.68 million this time. Underlying EBITDA shrank from a positive £5.19 million to £4.367 million with the company saying that as well as the website issues, profitability was impacted by opening costs for new stores.

And the loss before tax widened from £2.8 million to £6.3 million while the net loss grew from £2.54 million to £6.16 million.

At the end of the period in question, Nick Vance took over from Justin Stead as CEO of the business with the company saying that Vance has over 30 years of experience across all aspects of brand management, retail, wholesale and operations. He was previously COO at Radley for five years.

Management remains cautious in its forward outlook with sales in its global DTC channels expected to continue growing above the market rate, although demand via wholesale channels is expected to decline as some partners look to reduce stock levels.